This past weekend the problem was massive traffic jams near Buffalo’s Canalside. But the omissions that helped to create vehicular gridlock on a pleasant summer evening may result someday in more dire consequences for Buffalo’s Lake Erie shoreline.

As reported by WIVB-TV on August 29, 2016, the presence of a massive rubber duck is being blamed for hours of traffic gridlock on a pleasant summer evening:

The world’s largest rubber duck was a huge hit. Officials say it’s the most popular attraction to ever come to Canalside. But the big crowds caused a traffic nightmare at the waterfront.

Don’t blame the duck. The guilty parties are the state and local officials who have failed to do the thoughtful planning they were obliged to do each time a new development project was being considered for Buffalo’s waterfront.

While public officials have expressed concern over the weekend gridlock, they have not acknowledged what they could have done to prevent the unintended creation of Buffalo’s largest parking lot.

Sam Hoyt, regional president of Empire State Development (the state agency most involved in development of the city’s waterfront), told WGRZ-TV that ESD takes seriously the public’s concerns over congestion, and then exclaimed, “… [W]e’re thrilled with the popularity of Buffalo’s waterfront.”

Mr. Hoyt’s sentiments were echoed in a Buffalo News August 31st editorial entitled “Growing Pains – Gridlock during waterfront events is an indicator of a city on the mend”:

… [T]he main point to be taken from the weekend’s gridlock is that people want to come to the Buffalo waterfront. It was all but unthinkable just a few years ago. Today, it is so popular that organizers will have to plan their events more carefully. And, what’s the problem with that?

With all due respect, let me tell you what the problem is: State and local officials have consistently failed to follow the intent and purpose of SEQRA [the State Environmental Quality Review Act] when considering new development along Buffalo’s waterfront. They have opted for expedited approval of projects – such as HarborCenter – rather than gathering useful information through the Environmental Impact Statement [EIS] process.

In 2012 and 2013, both Buffalo’s Common Council – while deciding whether to transfer ownership of the “Webster block” from the city to the Pegulas – and the Erie Canal Harbor Development Corporation (a subsidiary of Empire State Development) – when deciding whether to modify its Canalside development plans to allow for the construction of HarborCenter – had the legal authority (and, I would argue, obligation) to require the HarborCenter developers to prepare an EIS. They decided instead to issue a “Negative Declaration” and claim that HarborCenter, with its multiple hockey rinks, hotel, restaurants, night club, retail space, etc., etc., would not adversely impact the environment – including traffic levels.

Asking the Pegulas – deep-pocket owners who did not have the option of building a similar three-rink hockey complex any place else – to prepare an EIS to address, at a minimum, traffic impacts in and around its proposed project, would have provided a framework to perform four important functions:

(4) provide the public with a meaningful opportunity to offer informed comments to assist the government agencies in making its decision whether to go forward with the project as proposed.

The failure to fully and effectively utilize SEQRA to address potential Canalside traffic congestion is certainly disappointing. But what is truly disconcerting – and inexplicable – is how an obscure state agency, the SUNY College of Nanoscale Science and Engineering (CNSE), has placed in jeopardy the future health and sustainability of the Buffalo River and Buffalo’s Outer Harbor.

CSNE – an entity under the control of Gov. Andrew Cuomo and totally unaccountable to the residents of the City of Buffalo – approved the largest piece of the “Buffalo Billion” program, the Buffalo High-Tech Manufacturing Innovation Hub @ RiverBend, in May 2014 without the preparation of an Environmental Impact Statement.

Under law, an EIS is presumed necessary whenever a project would physically alter 10 or more acres of land, or exceed construction of 240,000 square feet of non-residential facilities. Nonetheless, the Cuomo administration knowingly circumvented the safeguards built into SEQRA by approving construction of a 90-acre, 1-million square-foot complex in a highly sensitive area in May 2014without preparation of an EIS.

The decision to place RiverBend’s Innovation Hub along the Buffalo River prior to conducting the proper environmental review to determine if the site is appropriate for such activities was inexcusable. The by-products of manufacturing solar panels at the RiverBend site have never been identified publicly. We cannot rationally and responsibly research, develop, and manufacture “clean energy” products if the processes involved could harm the surrounding environs, including the fragile Lake Erie shoreline.

The College of Nanoscale Science and Engineering – which, since September 2014, is also known as SUNY Polytechnic Institute (SUNY Poly) – has the distinction of praising “the vision and leadership of Governor Andrew Cuomo” in the very first sentence of its website’s “About Us” page. Its Home page also boasts a photo of our Governor proclaiming, “Nanotechnology is a juggernaut for the activation of the entire economy.”

Sadly, for the future of the Buffalo River and the Lake Erie shoreline, CSNE has not been a juggernaut for the protection of the environment in Western New York. As a sobering omen of what may lie ahead as a result of a state agency – in the midst of a gubernatorial election campaign – failing to conduct a thorough environmental review, CSNE has recently encountered a bit of a problem. According to a SEQRA notice filed with the State DEC, slag materials “containing low levels of technology enhanced naturally occurring radioactive material (TENORM)” were excavated during redevelopment activities at the RiverBend site. CSNE has proposed “placing the material over an approximate 10 + acre area of the 90 acre Project Site followed by placement of a demarcation layer and covering…”.

Not surprisingly, consistent with its decision not to prepare an EIS for the entire 90-acre, 1-million square foot manufacturing project, CSNE has issued a Negative Declaration claiming that the on-site placement of this radioactive material will not adversely impact the environment. [Note: There is still time for an appropriate agency to challenge the Negative Declaration in an Article 78 proceeding in State Supreme Court.]

There’s no duck to blame for this problem. But I do know a number of turkeys masquerading as public officials who should be held accountable.

It may be a mere coincidence, but Gerald A. Buchheit, Jr. – the developer behind the 23-story tower proposed for the former Freezer Queen site – has something in common with billionaires Jeremy M. Jacobs, Sr. and Kim and Terry Pegula. They all have given large donations to Governor Andrew Cuomo and all have received an environmental “free pass” for recent Buffalo projects.

The State Environmental Quality Review Act [SEQRA] presumes that a major development project may have a significant adverse impact on one or more aspect of the environment. For that reason, SEQRA anticipates that a major project – referred to as a “Type I action” – will require preparation of a Draft Environmental Impact Statement [DEIS]. Fortunately for these campaign contributors, the City’s Planning Board and the Erie Canal Harbor Development Corp. [a state-created entity] fast-tracked the approval process for each developer’s recent project, and issued a “Negative Declaration.” By doing so, the SEQRA process was abruptly ended, and, as a result, Mr. Jacobs, the Pegulas, and, now, Mr. Buchheit, were able to circumvent any meaningful environmental review or public scrutiny, as well as the expense and delay accompanying the DEIS process.

As I addressed in a September 2015 post in greater detail [see https://withallduerespectblog.com/2015/09/23/buffalos-billionaires-hailed-as-philanthropists-insist-on-profiting-at-the-publics-expense/], Mr. Jacobs made a $50,000 donation in June 2010 to Andrew Cuomo’s gubernatorial campaign (and, also contributed $11,250 to Mr. Cuomo in August 2014 during the Democratic primary skirmish between the incumbent Governor and challenger Zephyr Teachout). In between the two political donations, the City Planning Board issued a Negative Declaration for the new headquarters of the Jacobs family’s Delaware North company – located at the corner of Chippewa Street and Delaware Avenue – eliminating the need for a DEIS.

New York State records show that in 2013 and 2014 Kim and Terry Pegula made personal contributions totaling $67,000 to Gov. Andrew Cuomo. The Pegulas’ massive waterfront project – HarborCenter – was approved by the Cuomo-controlled ECHDC without the requirement of a DEIS.

Despite his apparent preference for the Republican Party and its candidates, Gerry Buchheit wrote a $25,000 check to Andrew Cuomo’s campaign fund in June 2015. The prior year, he had made a post-primary donation of $5,000 to Gov. Cuomo’s running mate, Kathy Hochul. [See Buchheit Donations.] On May 31, 2016, the City Planning Board issued a Negative Declaration for Buchheit’s Queen City Landing project, concluding the environmental review process for the controversial Outer Harbor tower.

It has not yet occurred, but odds are awfully good that Mr. Buchheit will soon have something else in common with Buffalo’s billionaire developers – financial assistance for his project through the State’s Brownfield Cleanup Program. The State Department of Environmental Conservation – which acquiesced to the City Planning Board’s request to make the SEQRA determinations for Buchheit’s Outer Harbor project – currently is reviewing Queen City Landing’s dual applications for brownfield assistance.

** By embracing – rather than eschewing – corporate welfare/crony capitalism, the Pegula and Jacobs families help perpetuate a political system where corporate money speaks much more loudly than the voices of average citizens. **

Terry Pegula, co-owner – with his wife Kim Pegula – of the Buffal Sabres, Buffalo Bills, and HarborCenter, was introduced as a “true Buffalo philanthropist” at the September 21st grand opening of the Marriott hotel, an imposing structure at the edge of Buffalo’s “lighter, quicker, cheaper” Canalside. One week earlier, a Buffalo News editorial touted “the absolute dedication” of Jeremy M. Jacobs Sr. “toward this community” following his family’s $30 million gift to the University at Buffalo medical school. An accompanying article on September 14 referred to the family’s “philanthropy” as transformational, noting that the Jacobs clan had provided the second largest donation in UB history “behind only a $40 million gift made anonymously in 2011 by a late local doctor.”

Undoubtedly, a $30 million donation – regardless of its tax-deductible status, and whether or not it represents less than one percent of Mr. Jacobs’ estimated $4 billion net worth – is staggering. From my perspective, however, a “philanthropist” is a person who does more than make a generous gift – she or he actively promotes human welfare and social reform.

Jeremy Jacobs, with his billions, and Terry Pegula, reported by Forbes as having an estimated $4.6 billion net worth, were recently in a position to demonstrate a true commitment to the future of Western New York. As billionaires, the Jacobs and Pegula families could afford construction of their respective downtown Buffalo projects without the necessity of financial assistance in the form of real property tax abatements, sales tax credits, and other manner of corporate welfare. Proceeding without taxpayer-funded aid would have set a significant example for other well-heeled developers, and would have constituted a highly visible first step in restoring a semblance of integrity to our political system. But, motivated perhaps by a sense of entitlement, Buffalo’s Billionaires chose profit over the promotion of political reform and human welfare.

Despite being owned by one of the Nation’s wealthiest citizens, a Buffalo-bred company won hundreds of thousands of dollars in tax breaks Monday, to ensure it stays in the Queen City for foreseeable future. The Erie County Industrial Development Agency (ECIDA) board of directors voted unanimously to grant Delaware North, owned by billionaire Jeremy Jacobs, $807,000 in sales tax abatements, so that it can move its corporate headquarters from the Key Center, approximately two blocks to a new $80 million building proposed by Uniland Development at the corner of Delaware Avenue at Chippewa.

Notably, the vote approving $800,000 in tax breaks [chump-change for a man worth four billion] was preceded by a less-than-philanthropic warning from the senior Jacobs son, Jerry Jacobs Jr., that Delaware North would find it “hard to turn down” a better offer from another city if it failed to receive the financial assistance it had requested. Equally disconcerting, Gov. Andrew Cuomo directly interceded on behalf of Delaware North and, as reported by the Buffalo News, “placed a call to CEO Jeremy Jacobs Sr. to assure him that his administration will do what it can to keep Delaware North in Buffalo.”

What is most troubling about the Governor’s call to “philanthropist” Jacobs is the fact that the Buffalo billionaire had made a $50,000 donation in June 2010 to Mr. Cuomo’s campaign, and contributed an additional $11,250 to Andrew Cuomo in August 2014 during the Democratic primary skirmish between the incumbent Governor and challenger Zephyr Teachout.

Note: Ms. Teachout, a Fordham University law professor and staunch critic of government corruption, had the following to say in an op-ed piece printed in the Buffalo News just weeks after Mr. Jacobs generously donated to Mr. Cuomo’s campaign:

…

Western New York cannot afford to repeat the mistakes it made generations ago when businesses placed profits over clean air, clean water and the health of residents. The Buffalo Billion must be allocated without favoritism, and the selection process should be transparent. Winners must include local companies and small businesses that truly need the assistance to grow. Certainly the commitment of 20 percent of the Buffalo Billion to one project, RiverBend – a project that has repeatedly changed in size and scope – should be carefully re-evaluated.

It may only be a coincidence, but it is demoralizing for competing companies, taxpayers and residents to learn that two prominent Buffalo developers, LP Ciminelli and Uniland Development, were awarded major developer status for two Buffalo Billion projects following sizable contributions to Andrew Cuomo’s 2014 campaign.

Meanwhile, the Pegulas (frackers who who made their fortune in oil and natural gas) possess the wealth needed to spend a total of $1.6 billion to purchase the Buffalo Sabres and Buffalo Bills and develop HarborCenter. And, as expressed by a longtime confidant of the billionaire couple, they were “not upset at all” that the final price tag for constructing “something very special” alongside Buffalo’s Inner Harbor exceeded initial projections by approximately $40 million.

Perhaps the higher final price for HarborCenter “was not a concern” for these Buffalo newcomers because they are receiving public assistance totaling around $57 million to further their for-profit venture. They applied for, and received at taxpayers’ expense, a thirty-seven-million-dollar corporate welfare package for the HarborCenter project, described in the following manner by the Buffalo News:

… The ECIDA approved a nearly $37 million tax incentive package that includes $28 million in property tax breaks over 10 years, $7.5 million in sales tax savings and $1.2 million in mortgage-recording tax breaks.

Oddly, the media appear eager to downplay the financial aid that the Pegulas have received in furtherance of the HarborCenter development. Chris Caya, the usually reliable WBFO reporter, refers to “a relatively small public subsidy” in his recent report, identifying “$35 million in tax breaks,” but failing to reference the additional $20 million in brownfield tax credits. Similarly, Buffalo News reporter Jonathan D. Epstein, felt the need to favorably contrast HarborCenter and UB’s new medical school, Kaleida’s new women and children’s hospital, and SolarCity at Riverbend, mentioning the $37 million ECIDA hand-out but leaving out a dollar amount when referring to state brownfield credits:

… Only the University at Buffalo’s new Jacobs School of Medicine and Biomedical Sciences ($375 million), the John R. Oishei Children’s Hospital ($270 million) and the factory for SolarCity at Riverbend in South Buffalo ($250 million) are more expensive. And all three of those are public-sector projects, with far more government support than the tax breaks – $37 million from the Erie County Industrial Development Agency plus state brownfields tax credits – that the Pegulas received…

But I do not want to understate the political donations made by the Pegulas. New York State records show that between September 13, 2013 and October 25, 2014 – a mere 13-month period – Kim and Terry Pegula made personal contributions totaling $67,000 to Gov. Andrew Cuomo.

There is no way we can rationally deny the ugly fact – so aptly captured by Buffalo News political cartoonist Adam Zyglis on September 18, 2015 – that Buffalo is indeed a “Tale of Two Cities,” with a spruced up waterfront and a morally-unacceptable poverty rate. Given this reality, we need billionaire philanthropists who will refuse to partake in corporate welfare and, instead, work toward a political system were the voices of Buffalo’s average citizens can be heard over the deafening roar of corporate money. I won’t hold my breath.

* WNY Developers can be as Opportunistic & Undeserving as their NYC Counterparts *

Buffalonians deserve objectivity and accurate facts from the media, especially from their primary daily newspaper. The editorial board of the Buffalo News failed to meet this standard with its March 30, 2015 opinion on the state’s Brownfield Cleanup Program (BCP). [Also see the article in the April 2, 2015 edition of the Buffalo News under the headline, “Region dodges brownfield bullet – Restrictions apply only to New York City…”]

As lawyers for developers well know, a “brownfield” is a parcel of land that may be difficult to reuse or redevelop because of the presence or potential presence of contamination. As described by the State, the brownfields program provides tax credits to developers to encourage the voluntary cleanup of contaminated properties so that they can be reused and redeveloped, and to reduce development pressure on “greenfields”.

According to the recent Buffalo News editorial, “undeserving” and “opportunistic” downstate developers are scamming the program “to help fund projects in high-value areas … that would have been built without the tax credits.” In contrast – when viewed through the BN’s conveniently rose-colored glasses – “this region has used the program responsibly, helping pay for … SolarCity at RiverBend and downtown’s HarborCenter, and other worthy projects.”

Note: Despite prior remediation measures at the RiverBend site along the Buffalo River and Outer Harbor, an April 2, 2015 article in the Buffalo News, under the headline, “Radioactive material found at RiverBend, but work continues,” reports that the discovery of an iron ore kettle that set off radiation detection equipment when shipped to a landfill in Lewiston “has prompted a new wave of environmental testing at RiverBend.”

I am in no way excusing the manner in which brownfield-related tax credits have been used to subsidize New York City area projects. But, when evaluated by the criteria utilized by the Buffalo News when criticizing “opportunistic downstate developers,” HarborCenter, the development being built by Terry and Kim Pegula on the Inner Harbor’s “Webster Block,” certainly appears undeserving of special tax relief.

First and foremost, as heralded in Mayor Byron W. Brown’s April 2012 press releasesoliciting proposals for the “Webster Block,” the former parking lot located directly across from the First Niagara Center was “the most sought after parcel of land in the Buffalo-Niagara Region … considered a prized downtown parcel due to its location in Downtown Buffalo, its proximity to Buffalo’s waterfront, two major sports venues, and the Peace Bridge.” [Also see Mayor Brown’s 08/29/12 announcement selecting the HarborCenter proposal for the Webster Block site.] To suggest that the Pegulas needed the extra incentive of brownfield tax credits to proceed with their hockey-focused project – adjacent to the home of their Buffalo Sabres – is naïve, at best. Terry Pegula’s intention was to create a magnet for hockey lovers that would include the National Hockey League’s only three-rink complex by connecting the new facility with First Niagara Center. No other location would accomplish his goal, and existing green space in the Buffalo area was not threatened by the HarborCenter proposal..

Second, there is scarcely anything in the official records to suggest that protection of the public health and the environment mandated special treatment and cleanup of the “Webster Block” site, given the proposed plans to construct a 19-story mixed-use facility with a hotel, two NHL-sized hockey rinks, and other commercial uses. Although the former parking lot had been used for warehousing and manufacturing prior to 1980, it was not a “Superfund” site or widely known or thought to be highly contaminated. Contrary to the Buffalo News portrayal of a typical brownfield site, the HarborCenter parcel could not fairly be characterized as a heavily contaminated property where substantial cleanup and construction costs outweighed the future value of the project

As described in a February 2013 Buffalo News article, the Pegulas planned to spend $8.7 million to clean up the HarborCenter site, and anticipated receiving $20 million in state brownfield tax credits. That tidy profit is on top of the nearly $37 million incentive package the billionaire couple received from the Erie County Industrial Development Agency (ECIDA) in real property and sales tax relief.

One could easily conclude that WNY developers can be as opportunistic and undeserving as their downstate counterparts.

As veteran reporter and Investigative Post founder Jim Heaney observed recently: while Buffalo was in the midst of its “building boom” last summer, the Queen City had 4 construction cranes piercing the sky; Toronto had 154.

More troubling than the Cuomo administration’s hyperbole is the campaign suggesting that the governor’s “Buffalo Billion” tactics should be used as a role model for all of upstate New York. According to Mr. Zemsky, communities need to “learn the lesson of the Buffalo Billion” and transform their economies to be self-sustaining through “real investments that actually create jobs.”

Unfortunately, the true lesson that the public should take from Buffalo’s so-called “economic rebirth” is profoundly troubling and anything but exemplary.

Western New York’s “building boom” rests on a dubious foundation. Three symbols of Buffalo’s “turnaround” – RiverBend’s Innovation Hub at the Outer Harbor:

and Terry and Kim Pegula’s HarborCenter project on the former Webster Block in downtown Buffalo:

share two troubling traits:

(1) The government decision-makers “fast-tracked” their approvals by circumventing SEQRA’s Environmental Impact Statement (EIS) process. The EIS is “the heart” of SEQRA (the State Environmental Quality Review Act). When done correctly, the EIS provides a “hard look” at the potential significant adverse impacts of a proposed action, and a detailed description and evaluation of reasonable alternatives and mitigation measures. Importantly, it offers the public a meaningful vehicle for input by mandating a minimum 30-day “public comment period” at an early enough stage in the planning process that true flexibility exists.

[Graph prepared by Arthur J. Giacalone and James A. Giacalone]

(2) Large sums of taxpayer money and “corporate welfare” have been allocated to the three projects. The State of New York intends to invest $225 million in the Innovation Hub project to provide roads and infrastructure at the site, construct the first two of six buildings, and purchase and own expensive scientific equipment. The Erie County Industrial Development Agency (ECIDA) has agreed to provide billionaires Terry and Kim Pegula an incentive package of nearly $37 million for the HarborCenter development, a 19-story, 650,000-square-foot project, including $28 million in property tax breaks over ten years, $7.5 million in sales tax relief, and $1.2 million in mortgage tax breaks. Additionally, the HarborCenter developers can anticipate receiving $20 million in brownfield-related tax credits for spending $8.7 million to clean up the former parking lot site. Not surprisingly [see the note below], Gov. Cuomo used his influence to make certain that the Jacobs – another billionaire family – obtained a controversial $807,000 in sales tax relief from the ECIDA to subsidize the two-and-a-half block move of the Delaware North Companies’ headquarters from the Key Center in the 500 block of Buffalo’s Main Street to 250 Delaware Avenue. Uniland Development, Delaware North’s partner in constructing the 12-story, 472,320-square-foot mixed use development (with 4-story parking ramp) at the corner of Delaware Ave. and Chippewa Street, obtained $3.2 million in real estate tax relief from the ECIDA.

Note: The Buffalo News reported in 2013 that Gov. Cuomo had received political donations totaling $105,026 since 2006 “from either Delaware North or members of the Jacobs family.”

SUNY’s CSNE disregarded SEQRA’s presumption that the comprehensive environment assessment mandated by the EIS process is required whenever a proposed project meets any one of the thresholds for what SEQRA calls a “Type 1 action.” Two of those thresholds are particularly relevant here. The Innovation Hub project involves the physical alteration of 90 acres of land, which is nine times the 10-acre threshold for a “Type 1” action. It also entails the construction of nearly one million square feet of buildings – more than four times SEQRA’s 240,000-square-foot threshold triggering the presumption that an EIS be prepared.

“Redevelopment planned along the Buffalo River corridor needs to be better integrated at all planning levels with the restoration investments made through the RAP process to date. This will ensure that adequate site-level policies and protections are in place for long-term RAP delisting goals. “

In November 2013, when Gov. Cuomo announced the State’s plan to invest $225 million in the Innovation Hub project, Howard Zemsky, in his capacity as co-chair of the Western New York Regional Economic Development Council, made the following proclamation: “The Buffalo Billion is intended to be transformative. We’re the capital of clean energy in New York State.”

It is rather ironic – if not perverse – that Cuomo and Zemsky have chosen to transform Buffalo into “the capital of clean energy” by ignoring SEQRA’s comprehensive environmental review process. SEQRA was enacted in the mid-1970s to prevent future development from repeating the environmental devastation that eventually led to designation of the Buffalo River’s “Area of Concern” and decades-long remedial action. The decision to place RiverBend’s Innovation Hub in a highly sensitive area along the Buffalo River prior to conducting the proper environmental review to determine if the site is appropriate for such activities is, at a minimum, indefensible and irresponsible. We cannot rationally and responsibly research, develop, and manufacture “clean energy” products if the process of doing so harms the surrounding environs, which includes the Lake Erie shoreline.

Neither the environment, nor New York’s taxpayers, can afford to use the Buffalo Billion or the Queen City’s “economic rebirth” as a role model for future development.

With All Due Respect,

Art Giacalone

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